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CommVault Announces First Quarter Fiscal 2014 Financial Results



       CommVault Announces First Quarter Fiscal 2014 Financial Results

Total Revenue of $134.4 million, up 21% year over year

GAAP EBIT of $21.4 million; GAAP EPS $0.27

Non-GAAP EBIT of $31.3 million; Non-GAAP EPS $0.40

PR Newswire

OCEANPORT, N.J., July 30, 2013

OCEANPORT, N.J., July 30, 2013 /PRNewswire/ --

First Quarter Fiscal 2014 Highlights Include:

                               First Quarter
GAAP Results:
Revenues                       $ 134.4 million
Income from Operations (EBIT)  $ 21.4 million
EBIT Margin                    15.9%
Diluted Earnings Per Share     $0.27
Non-GAAP Results:
Income from Operations (EBIT)  $ 31.3 million
EBIT Margin                    23.3%
Diluted Earnings Per Share     $0.40

CommVault (NASDAQ: CVLT) today announced its financial results for the first
quarter ended June 30, 2013. 

(Logo: http://photos.prnewswire.com/prnh/20110329/MM73841LOGO )

N. Robert Hammer, CommVault's chairman, president and CEO stated, "We began
fiscal year 2014 with a solid first quarter, which was highlighted by
year-over-year revenue growth of 21% and Non-GAAP operating income growth of
38%. Our year-over-year revenue growth of 21% was driven by continued demand
for our Simpana 10 data and information management software platform and
excellent results from our services organization. Our first quarter revenue
and earnings performance continues to validate our market leadership and
technological innovation combined with our operating discipline."

Total revenues for the first quarter of fiscal 2014 were $134.4 million, an
increase of 21% over the first quarter of fiscal 2013 and a decrease of 3%
over the prior quarter.  Software revenue in the first quarter of fiscal 2014
was $65.3 million, an increase of 20% year-over-year and a decrease of 9%
sequentially.  Services revenue in the first quarter of fiscal 2014 was $69.1
million, increases of 21% year-over-year and 5% sequentially.

Income from operations (EBIT) was $21.4 million for the first quarter, a 30%
increase from $16.4 million in the same period of the prior year.  Non-GAAP
income from operations (EBIT) increased 38% to $31.3 million in the first
quarter of fiscal 2014 compared to $22.6 million in the first quarter of the
prior year.  On a sequential basis, non-GAAP income from operations (EBIT)
decreased 1% in the first quarter of fiscal 2014.

For the first quarter of fiscal 2014, CommVault reported net income of $13.5
million, an increase of $3.3 million compared to the same period of the prior
year.  Non-GAAP net income for the quarter increased 38% to $19.9 million, or
$0.40 per diluted share, from $14.4 million, or $0.30 per diluted share, in
the same period of the prior year. 

Operating cash flow totaled $24.6 million for the first quarter of fiscal 2014
compared to $17.9 million in the first quarter of fiscal 2013. Total cash and
short-term investments were $458.8 million as of June 30, 2013 compared to
$435.9 million as of March 31, 2013.  There were no share repurchases during
the first quarter of fiscal 2014, which still leaves $102.8 million remaining
in the existing repurchase plan available through March 31, 2014.

A reconciliation of GAAP to non-GAAP results has been provided in Financial
Statement Table IV included in this press release.  An explanation of these
measures is also included below under the heading "Use of Non-GAAP Financial
Measures."

Recent Business Highlight:

  o On July 1, 2013, CommVault announced Forrester Research, Inc. named
    CommVault a leader in The Forrester Wave™: Enterprise Backup Software, Q2
    2013[1]. The Forrester Wave is an objective methodology that evaluates
    vendors on current offering, strategy and market presence, against
    pre-defined evaluation criteria. CommVault is top ranked in the current
    offering category for Simpana 10 software, scoring 4.45 points out of a
    possible five.
  o On June 11, 2013, CommVault announced that for the third consecutive year,
    it has been positioned in the "Leaders" quadrant of Gartner Inc.'s report,
    "Magic Quadrant: Enterprise Backup/Recovery Software."[2] CommVault
    believes this designation reinforces its vision that the future of storage
    is moving toward unified data and information as enterprises adopt modern
    techniques to protect and recover their critical applications.
  o On June 4, 2013, CommVault announced that Info-Tech Research Group has
    recognized CommVault as an industry "Champion" in Virtual Backup Software,
    Email Archiving, and Backup Software for Heterogeneous Environments in its
    latest Vendor Landscape Reports.

Use of Non-GAAP Financial Measures
CommVault has provided in this press release the following non-GAAP financial
measures:  non-GAAP income from operations, non-GAAP income from operations
margin, non-GAAP net income and non-GAAP diluted earnings per share.  This
selected financial information has not been prepared in accordance with GAAP. 
CommVault uses these non-GAAP financial measures internally to understand,
manage and evaluate its business and make operating decisions.  In addition,
CommVault believes these non-GAAP operating measures are useful to investors,
when used as a supplement to GAAP financial measures, in evaluating
CommVault's ongoing operational performance.  CommVault believes that the use
of these non-GAAP financial measures provide an additional tool for investors
to use in evaluating ongoing operating results and trends, and in comparing
its financial results with other companies in CommVault's industry, many of
which present similar non-GAAP financial measures to the investment
community.   

These non-GAAP financial measures should be considered as a supplement to, and
not as a substitute for or superior to, financial information prepared in
accordance with GAAP.  Investors are encouraged to review the reconciliation
of these non-GAAP measures to their most directly comparable GAAP financial
measures, which are provided in Table IV included in this press release.

Non-GAAP income from operations and non-GAAP income from operations margin. 
These non-GAAP financial measures exclude noncash stock-based compensation
charges and additional FICA and related payroll tax expense incurred by
CommVault when employees exercise in the money stock options or vest in
restricted stock awards.  CommVault believes that these non-GAAP financial
measures are useful metrics for management and investors because they compare
CommVault's core operating results over multiple periods.  When evaluating the
performance of CommVault's operating results and developing short and long
term plans, CommVault does not consider such expenses.  Although noncash
stock-based compensation and the additional FICA and related payroll tax
expenses are necessary to attract and retain employees, CommVault places its
primary emphasis on stockholder dilution as compared to the accounting charges
related to such equity compensation plans.  In addition, because of the
varying available valuation methodologies, subjective assumptions such as
volatility outside CommVault's control and the variety of awards that
companies can issue, CommVault believes that providing non-GAAP financial
measures that exclude noncash stock-based compensation expense and the
additional FICA and related payroll tax expenses incurred on stock option
exercises and vesting of restricted stock awards allow investors to make
meaningful comparisons between CommVault's operating results and those of
other companies. 

There are a number of limitations related to the use of non-GAAP income from
operations and non-GAAP income from operations margin.  The most significant
limitation is that these non-GAAP financial measures exclude certain operating
costs, primarily related to noncash stock-based compensation, which is of a
recurring nature.  Noncash stock-based compensation has been, and will
continue to be for the foreseeable future, a significant recurring expense in
CommVault's operating results.  In addition, noncash stock-based compensation
is an important part of CommVault's employees' compensation and can have a
significant impact on their performance.  Lastly, the components CommVault
excludes in its non-GAAP financial measures may differ from the components
that its peer companies exclude when they report their non-GAAP financial
measures.  

CommVault's management generally compensates for limitations described above
related to the use of non-GAAP financial measures by providing investors with
a reconciliation of the non-GAAP financial measure to the most directly
comparable GAAP financial measure. Further, CommVault management uses non-GAAP
financial measures only in addition to, and in conjunction with, results
presented in accordance with GAAP.

Non-GAAP net income and non-GAAP diluted EPS.  Non-GAAP net income excludes
noncash stock-based compensation and the additional FICA and related payroll
tax expenses incurred by CommVault when employees exercise in the money stock
options or vest in restricted stock awards, which are discussed above, as well
as applies a non-GAAP effective tax rate of 37% in fiscal 2014 and fiscal
2013. 

CommVault anticipates that in any given quarter its non-GAAP tax rate may be
either higher or lower than the GAAP tax rate as evidenced by historical
fluctuations.  The GAAP tax rate for the three months ended June 30, 2013 was
38% and the GAAP tax rate for the three months ended June 30, 2012 was 39%. 
On an annual basis, the GAAP tax rate over the past six fiscal years was 35%
for fiscal 2013, 36% for fiscal 2012, 42% for fiscal 2011, 43% for fiscal
2010, 44% for fiscal 2009, and 23% for fiscal 2008.  In addition, CommVault's
cash tax rate has been significantly lower than its GAAP tax rate in recent
fiscal years.  The cash tax rate over the prior three fiscal years is
estimated to be approximately 12% for fiscal 2013, approximately 14% for
fiscal 2012 and approximately 11% for fiscal 2011.  Also, the cash tax rate
for the three months ended June 30, 2013 is estimated to be approximately
18%.  CommVault expects that its cash tax rate will remain lower than its GAAP
tax rate through fiscal 2014 and into fiscal 2015.  CommVault defines its cash
tax rate as the total amount of cash income taxes payable for the fiscal year
divided by consolidated GAAP pre-tax income.

CommVault measured itself to non-GAAP tax rates of 37% in fiscal 2013 and
anticipates that it will continue to measure itself to a non-GAAP tax rate of
37% through fiscal 2014.  CommVault believes that the use of a non-GAAP tax
rate is a useful measure as it allows management and investors to compare its
operating results on a more consistent basis over the multiple periods
presented in its earnings release without the impact of significant variations
in the tax rate as more fully described above.  It is also more reflective of
the increase in the cash tax rate as it approaches the GAAP tax rate over the
next one to two fiscal years.  Non-GAAP EPS is derived from non-GAAP net
income divided by the weighted average shares outstanding on a fully diluted
basis. 

CommVault considers non-GAAP net income and non-GAAP diluted EPS useful
metrics for CommVault management and its investors for the same basic reasons
that CommVault uses non-GAAP income from operations and non-GAAP income from
operations margin. In addition, the same limitations as well as management
actions to compensate for such limitations described above also apply to
CommVault's use of non-GAAP net income and non-GAAP EPS.

Conference Call Information

CommVault will host a conference call today, July 30, 2013, at 8:30 a.m.
Eastern Time (5:30 a.m. Pacific Time) to discuss its financial results.  To
access this call, dial 888-895-5479 (domestic) or 847-619-6250
(international).  Investors can also access the webcast by visiting
www.commvault.com/ir. The live webcast and replay will be hosted under the
"Events" section of the website. An archived webcast of this conference call
will also be available following the call.

[1] Forrester Research, Inc., "The Forrester Wave™: Enterprise Backup and
Recovery Software, Q2 2013," by Rachel Dines, with Stephanie Balaouras and
Jessica McKee, June 28, 2013
[2] Gartner Inc., "Magic Quadrant: Enterprise Backup/Recovery Software," by
Dave Russell, Pushan Rinnen, June 5, 2013

About CommVault

A singular vision – a belief in a better way to address current and future
data management needs – guides CommVault in the development of Singular
Information Management® solutions for high-performance data protection,
universal availability and simplified management of data on complex storage
networks. CommVault's exclusive single-platform architecture gives companies
unprecedented control over data growth, costs and risk. CommVault's Simpana®
software suite of products was designed to work together seamlessly from the
ground up, sharing a single code and common function set, to deliver
superlative Data Protection, Archive, Replication, Search and Resource
Management capabilities. More companies every day join those who have
discovered the unparalleled efficiency, performance, reliability, and control
only CommVault can offer. Information about CommVault is available at
www.commvault.com. CommVault's corporate headquarters is located in Oceanport,
New Jersey in the United States. 

About the Magic Quadrant

Gartner does not endorse any vendor, product or service depicted in its
research publications, and does not advise technology users to select only
those vendors with the highest ratings. Gartner research publications consist
of the opinions of Gartner's research organization and should not be construed
as statements of fact. Gartner disclaims all warranties, expressed or implied,
with respect to this research, including any warranties of merchantability or
fitness for a particular purpose.

Safe Harbor Statement

This press release may contain forward-looking statements, including
statements regarding financial projections, which are subject to risks and
uncertainties, such as competitive factors, difficulties and delays inherent
in the development, manufacturing, marketing and sale of software products and
related services, general economic conditions and others.  Statements
regarding CommVault's beliefs, plans, expectations or intentions regarding the
future are forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended.  All such forward-looking statements are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.  Actual results may differ materially from
anticipated results.  CommVault does not undertake to update its
forward-looking statements.  The development and timing of any product release
as well as any of its features or functionality remain at our sole discretion.

©1999-2013 CommVault Systems, Inc. All rights reserved. CommVault, CommVault
and logo, the "CV" logo, CommVault Systems, Solving Forward, SIM, Singular
Information Management, Simpana, Simpana OnePass, CommVault Galaxy, CommVault
Edge, Unified Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor,
Vault Tracker, InnerVault, Quick Snap, QSnap, Recovery Director, CommServe,
CommCell, IntelliSnap, ROMS and CommValue, are trademarks or registered
trademarks of CommVault Systems, Inc. All other third party brands, products,
service names, trademarks, or registered service marks are the property of and
used to identify the products or services of their respective owners. All
specifications are subject to change without notice.

 

Table I
CommVault Systems, Inc.

 

Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)
                                            Three Months Ended

                                            June 30,
                                            2013       2012
Revenues:
Software                                    $ 65,299   $ 54,235
Services                                      69,109     57,032
Total revenues                                134,408    111,267
Cost of revenues:
Software                                      655        678
Services                                      17,123     14,612
Total cost of revenues                        17,778     15,290
Gross margin                                  116,630    95,977
Operating expenses:
Sales and marketing                           67,201     56,387
Research and development                      12,851     10,951
General and administrative                    13,728     11,090
Depreciation and amortization                 1,453      1,133
Income from operations                        21,397     16,416
Interest income                               242        236
Income before income taxes                    21,639     16,652
Income tax expense                            8,177      6,527
Net income                                  $ 13,462   $ 10,125
Net income per common share:
Basic                                       $ 0.29     $ 0.23
Diluted                                     $ 0.27     $ 0.21
Weighted average common shares outstanding:
Basic                                         46,542     44,761
Diluted                                       49,289     47,582

 

Table II
CommVault Systems, Inc.

 

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)
                                           June 30,   March 31,
                                           2013       2013
Assets
Current assets:
Cash and cash equivalents                  $ 458,818  $ 433,964
Short-term investments                       —          1,948
Trade accounts receivable, net               75,219     85,033
Prepaid expenses and other current assets    12,032     15,225
Deferred tax assets, net                     21,128     19,328
Total current assets                         567,197    555,498
Deferred tax assets, net                     23,138     21,166
Property and equipment, net                  35,459     21,112
Other assets                                 6,948      7,078
Total assets                               $ 632,742  $ 604,854
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                           $ 5,584    $ 3,860
Accrued liabilities                          44,130     55,577
Deferred revenue                             156,556    152,967
Total current liabilities                    206,270    212,404
Deferred revenue, less current portion       32,641     31,303
Other liabilities                            7,107      7,130
Total stockholders' equity                   386,724    354,017
Total liabilities and stockholders' equity $ 632,742  $ 604,854

 

Table III
CommVault Systems, Inc.

 

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)
                                                          Three Months Ended

                                                          June 30,
                                                          2013       2012
Cash flows from operating activities
Net income                                                $ 13,462   $ 10,125
Adjustments to reconcile net income to net cash provided
by operating activities: 
Depreciation and amortization                               1,473      1,160
Noncash stock-based compensation                            9,508      5,928
Excess tax benefits from stock-based compensation           (8,285)    (3,060)
Deferred income taxes                                       (3,994)    237
Changes in operating assets and liabilities:
Trade accounts receivable                                   9,050      10,304
Prepaid expenses and other current assets                   3,150      686
Other assets                                                47         664
Accounts payable                                            217        384
Accrued liabilities                                         (7,192)    (7,385)
Deferred revenue                                            7,182      (1,240)
Other liabilities                                           (44)       106
Net cash provided by operating activities                   24,574     17,909
Cash flows from investing activities
Purchase of short-term investments                          —          (1,948)
Proceeds from maturity of short-term investments            1,948      3,146
Purchases for corporate campus headquarters                 (8,715)    (222)
Purchase of property and equipment                          (1,312)    (1,459)
Net cash used in investing activities                       (8,079)    (483)
Cash flows from financing activities
Proceeds from the exercise of stock options                 3,057      2,751
Excess tax benefits from stock-based compensation           8,285      3,060
Net cash provided by financing activities                   11,342     5,811
Effects of exchange rate — changes in cash                  (2,983)    (2,190)
Net increase in cash and cash equivalents                   24,854     21,047
Cash and cash equivalents at beginning of period            433,964    297,088
Cash and cash equivalents at end of period                $ 458,818  $ 318,135

 

Table IV
CommVault Systems, Inc.

 

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)
                                    Three Months Ended

                                    June 30,
                                    2013                     2012
Non-GAAP financial measures and
reconciliation:
GAAP income from operations         $      21,397            $     16,416
Noncash stock-based compensation           9,508                   5,928
(1)
FICA and related payroll tax
expense on stock option exercises          443                     296
and vesting on restricted stock
awards (2)
Non-GAAP income from operations     $      31,348            $     22,640
GAAP net income                     $      13,462            $     10,125
Noncash stock-based compensation           9,508                   5,928
(1)
FICA and related payroll tax
expense on stock option exercises          443                     296
and vesting on restricted stock
awards (2)
Non-GAAP provision for income taxes        (3,511)                 (1,937)
adjustment (3)
Non-GAAP net income                 $      19,902            $     14,412
Diluted weighted average shares            49,289                  47,582
outstanding
Non-GAAP diluted net income per     $      0.40              $     0.30
share
Footnotes - Adjustments
(1) Represents noncash stock-based compensation charges associated with stock
options and restricted stock units granted as follows:
                                    Three Months Ended

                                     June 30,
                                    2013                     2012
Cost of services revenue            $      298               $     184
Sales and marketing                        4,261                   2,636
Research and development                   957                     624
General and administrative                 3,992                   2,484
Stock-based compensation expense    $      9,508             $     5,928
(2) Represents additional FICA and related payroll tax expenses incurred by
CommVault when employees exercise in the money stock options or vest in
restricted stock awards.
(3) The provision for income taxes is adjusted to reflect CommVault's
estimated non-GAAP effective tax rate of approximately 37% in fiscal 2014 and
fiscal 2013.

 

SOURCE CommVault

Website: http://www.commvault.com
Contact: Investor Relations Contact: Michael Picariello, CommVault,
732-728-5380, ir@commvault.com
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